Working Paper: NBER ID: w25643
Authors: Grischa Perino; Robert A. Ritz; Arthur Van Benthem
Abstract: The world is under pressure to deliver on the 2015 Paris Climate Agreement. Individual jurisdictions are enacting policies such as phasing out coal, taxing aviation, and supporting renewable energy. These often overlap with a wider multi-jurisdictional carbon-pricing system like the EU's Emissions Trading System. We develop a general framework to study how such “overlapping climate policies” can help combat climate change—depending on their design, location and timing. Some policies are truly complementary while others backfire by raising aggregate emissions. At a conceptual level, our model encompasses most carbon-pricing systems used in practice and a wide range of popular unilateral policies.
Keywords: No keywords provided
JEL Codes: H23; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| overlapping policies (L49) | aggregate emissions (E10) |
| reduction in emissions demand in one sector (R22) | increase in emissions in other sectors (Q49) |
| unilateral carbon taxes/support for renewables (H23) | net reductions in emissions (H23) |
| internal carbon leakage (H23) | increase in emissions in other jurisdictions (F64) |